The Swiss National Bank (SNB) announced on Friday that it would continue to intervene in foreign currency markets when necessary to maintain inflation within its target range. This decision follows the U.S. Treasury’s inclusion of Switzerland on its list of countries being monitored for unfair currency and trade practices.
SNB Denies Currency Manipulation
In response to the U.S. Treasury Report published Thursday, the SNB denied accusations of currency manipulation, stating that it does not engage in practices aimed at influencing the value of the Swiss franc. The bank emphasized that it seeks to ensure the stability of the Swiss economy and does not intend to gain unfair competitive advantages.
Focus on Inflation Control
With Swiss inflation dipping into negative territory last month, largely due to the strong franc, the SNB reaffirmed its commitment to using interest rates and foreign exchange market interventions to achieve its inflation target of 0-2%. Swiss inflation fell to a four-year low in May, with prices dropping by 0.1%.
Ongoing Communication with U.S. Authorities
The SNB stated that it is in regular contact with U.S. authorities to explain Switzerland’s economic situation and monetary policy. However, the bank did not clarify whether further discussions with the United States were planned.
Concerns Over Foreign Currency Interventions
While Switzerland met two of the U.S. Treasury’s concerns regarding trade flows and its current account, it did not meet expectations related to foreign currency interventions. In 2024, the SNB purchased only $1 billion in foreign currencies, which is less than 0.1% of Swiss GDP, well below the U.S. Treasury’s threshold of 2% of economic output.
